What is the CIO

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What is the CIOs Role?

• Gartner Groups definition of the role of the CIO
  
• To provide technology vision and leadership for
  developing and implementing IT initiatives that
  create and maintain leadership for the enterprise
  in a constantly changing and intensely
  competitive marketplace.

Source Grupe, Fritz H., Simon Joost, and Nilesh
Patel, Passing the Baton Helping Your Successor
to Succeed. Information Systems Management,
Spring 2003, p. 19.
4
What is the CIOs Role?

• As IT leaders, CIOs
• Devise and manage organizational arrangements to
  meet business needs
• Set goals and direction
• Influence perception of ITs role and business
  value in an organization
• Establish relationship between business and IT at
  the executive level, help achieve shared vision

Source Lacity, Mary C and Leslie P. Wilcocks,
Global Information Technology Outsourcing In
Search for Business Advantage, John Wiley Sons,
Chichester, 2001, pp 252-253.
5
Evolution of the CIO

• 1960s
• Director of Data Processing
• Technical
• Automating back-office functions
• Little to no power, basement office (desk)
• 1970s
• Management Information Systems (MIS) Director
• Minicomputers appearing in more departments,
  network mainframes
• MIS Director starting to gain some power
• 1980s
• Chief Information Officer
• Proliferation of the PC, Control the chaos
• Companies saw the benefits of computer technology
• CIO starting to be viewed as a valuable,
  high-level executive

Source Melymuka, Kathleen, 35 Years of IT
Leadership The Evoluton of the IT Leader.
Computerworld, Sep 30, 2002. Vol. 36, Iss. 40  p
g. 28.
6
Evolution of the CIO

• 1990s to today
• Client/server applications instead of mainframe,
  costs begin to rise
• CIOs role as planner, architect, and budget
  manager reinforced
• Focus on strategic plans, strategic
  architecture, networking, competitors and
  partners

1960s Today
DP Director CIO (or some C-title)
Support player Senior Executive
View of IT as internal View of IT aligned with business world view
Geek among propeller heads Speaks business to business leaders
Source Melymuka, Kathleen, 35 Years of IT
Leadership The Evoluton of the IT Leader.
Computerworld, Sep 30, 2002. Vol. 36, Iss. 40  p
g. 28.
7
Common CIO Titles

• In the CIO survey, 73 of respondents had
  Chief-level titles, 35 had solely CIO titles.

Source Cosgrove Ware, Lorraine, What You Have
to Say Survey Results. CIO Magazine, Apr 1,
2003, www.cio.com/archive/040103/results.html,
viewed October 1, 2003.
8
To Whom Do CIOs Report?

• In the CIO survey, 47 of respondents report
  directly to the CEO

Source Cosgrove Ware, Lorraine, What You Have
to Say Survey Results. CIO Magazine, Apr 1,
2003, www.cio.com/archive/040103/results.html,
viewed October 1, 2003.
9
How Do CIOs Spend Their Days?

• Time allocation per day

Source Cosgrove Ware, Lorraine, What You Have
to Say Survey Results. CIO Magazine, Apr 1,
2003, www.cio.com/archive/040103/results.html,
viewed October 1, 2003.
10
Budgets and Staff

• 2002 survey of IT leaders, 388 respondents

Source Heres Looking at You Demographics of
the 2002 State of the CIO Survey, CIO
Magazine, Mar 1, 2002, www.cio.com/archive/030102/
demographics.html, viewed October 20, 2003.
11
Budgets and Staff

• 2002 survey of IT leaders, 469 respondents

Source Heres Looking at You Demographics of
the 2002 State of the CIO Survey, CIO
Magazine, Mar 1, 2002, www.cio.com/archive/030103/
demographics.html, viewed October 20, 2003.
12
Top Priorities of Todays CIOs

• According to recent Gartner survey of 620 CIOs
  and IT executives, the top priorities of todays
  CIOs are

Providing IT guidance to senior corporate executives
Demonstrating the business value of IT
Improving the internal governance of IT operations
Taking steps to reduce IT costs
Developing or outsourcing corporate IT architectures
Source Hoffman, Thomas, Gartner survey finds
continued CIO focus on cutting costs,
Computerworld, Mar 17, 2003, p. 13.
13
CIO Gender Statistics
1
2
N 500
N 539
Sources 1. The 2002 State of the CIO.
Heres Looking at You. CIO.com. As viewed on
October 26, 2003. lt www.cio.com/archive/03
0102/demographics.html gt 2. Ware, Lorraine
Cosgrove. The State of the CIO 2003, CIO.com.
As viewed on October 26, 2003. lt
www.cio.com/archive/040103/results.html gt
14
IT Gender Gap Widens
Overall IT Gender Gap Widening Again
Of all IT executives over age 40, female
executives account for 16.4. Only 7.8 of IT
leaders under age 40 are female.

• Factors Attributing to Decrease in Female IT
  Leaders
• Economic downturn.
• Fewer young women choosing IT careers - 41 in
  1996, 34.9 in 2002.
• Significant numbers of women exiting
  corporations to start own businesses. Now
  account for nearly 50 of privately owned US
  businesses.

• Source DAgostino, Debra. Where are All the
  Women IT Leaders? CIO Insight. October 1,
  2003. Website as view on October 26, 2003.
• lt http//www.cioinsight.com/article2/0,3959
  ,1309515,00.asp gt

15
Professional Experience
N 539

• Source Ware, Lorraine Cosgrove. The State of
  the CIO 2003, CIO.com. As viewed on October 26,
  2003. lt www.cio.com/archive/040103/results.html gt

16
Position Held before CIO

• Source The Role of the CIO. CIOInsight.com.
  February, 2003. As viewed on October 30, 2003
  lthttp//common.ziffdavisinternet.com/downloa
  d/0/1900/0123_research.pdf gt

17
Tenure as CIO

• Average time as CIO 4 years, 9 months

Source Ware, Lorraine Cosgrove. The State of
the CIO 2003, CIO.com. As viewed on October 26,
2003. lt www.cio.com/archive/040103/results.html gt
18
CIO Compensation
1
2

• Average CIO Total
• Compensation
• 167,242

N 279
N 539
Economy Hits IT Compensation
3
InformationWeek found that the economic downturn
reduced compensation for IT managers by 8 and by
11 for IT staff in 2002.

• Sources
• Ware, Lorraine Cosgrove. The State of the CIO
  2003, CIO.com. As viewed on October 26, 2003. lt
  www.cio.com/archive/040103/results.html gt
• The Role of the CIO. CIOInsight.com.
  February, 2003. 1. As viewed on October 30,
  2003.
• lt http//common.ziffdavisinternet.com/download/0/
  1900/0123_research.pdf gt
• George, Tischelle, Eileen Colkin, and Larry
  Greenemeier. Big Bucks Dry Up.
  InformationWeek.com. April 29, 2002.
• lthttp//www.informationweek.com/story/showArticle.
  jhtml?articleID6501877gt

19
CIO Skills Personality

• Technical Skills vs. People Skills
• In their study, Enns, Huff, and Golden challenge
  the conventional wisdom of organizational
  socialization theory that predicts significant
  differences in the influencing behaviors used by
  less technical and more technical CIOs.1

• By narrow margins, Enns found the following
  behavioral patterns
• Lesser technical CIOs use hard influencing
  behaviors coalition, legitimization, pressure
  (Greater technical CIOs use the hard behavior
  exchange.)
• Greater technical CIOs use soft influencing
  behaviors consultation, inspirational appeal,
  personal appeal (Lesser technical CIOs use the
  soft behavior ingratiation.)

60 of CIOs at large companies are EXTROVERTS!2
WHY?
Enns offers possible reason top executives may
not rise to the top without having the ability to
utilize influence behaviors.

• Sources
• 1. Enns, Harvey G., Sid L. Huff, and Brian R.
  Golden. How CIOs Obtain Peer Commitment to
  Strategic IS Proposals Barriers Facilitators.
• (2000) 6-7. lt http//www.sba.udayton.ed
  u/cio_influence/CIO Tech Back IBs-2.pdf gt
• 2. The Role of the CIO. CIOInsight.com.
  February, 2003. 2. As viewed on October 30, 2003.
  
• lt http//common.ziffdavisinternet.com/download/0/
  1900/0123_research.pdf gt

20
CIOs Take the Personality Test
Extrovert/Introvert Sensing/Intuition Judging/Perc
eiving Thinking/Feeling
Source The Role of the CIO. CIOInsight.com.
February, 2003. 2. As viewed on October 30,
2003. lt http//common.ziffdavisinternet.com/down
load/0/1900/0123_research.pdf gt
21
Factors in Attaining Peer Commitment
Enns, Huff, and Goldens study on how CIOs
attain peer commitment for IT projects revealed
key factors that CIOs must manage
1

• Environment
• Industry - information reliant (e.g. Finance) vs.
  material product based (e.g. Petroleum)
• Vision for IT - IT as Cost Center vs. IT as
  Transformer
• Centralization - centralized vs. decentralized
• Consistency of Proposals with business strategy
• Peer relationships - effective relationships
• Educate peers about strategic value of IT
  (consultation behavior)
• Build relationships, partnerships, and networks

Financial services CIO . . . IT was considered
a cost center. However, due to my relationships
with others in the organization, and my track
record of delivering on projects, IT is now
considered an Investment Center.
Source Enns, Harvey G., Sid L. Huff, and Brian
R. Golden. How CIOs Obtain Peer Commitment to
Strategic IS Proposals Barriers Facilitators.
(2000) 6-7. lt http//www.sba.udayton.edu
/cio_influence/Barriers and Facilitators.pdf gt
22
Factors in Attaining Peer Commitment

• Peer Background Accommodation
• Speaking the peers language - non-technical vs.
  technical
• Consultation (seeking peers participation) -
  peers with tech background resistance peers
  with lesser tech background commitment.
• Reason - technical peers view consultation as
  sign that CIO is unprepared.
• Ingratiation - peers with tech background
  resistance peers with lesser tech background
  commitment.
• Reason - technical peers seek the rationale and
  content of proposals. Other behavior is viewed
  as superfluous and irritating.
• Implementation Keys for Success
• Top-Down support - managers at top tier support
  project and ensure their subordinates actively
  support the project.
• Stakeholder support - critical that project has
  support of stakeholders.

CIOs peer The CIO is driven into seclusion if
(his/her) focus is just the technology. You are
at risk because a technology focus is not where
the business units reside.
Source Enns, Harvey G., Sid L. Huff, and Brian
R. Golden. How CIOs Obtain Peer Commitment to
Strategic IS Proposals Barriers Facilitators.
(2000) 6-7. lt http//www.sba.udayton.edu
/cio_influence/Barriers and Facilitators.pdf gt
23
CIOs Rank Skills for Success
N385
Source The Role of the CIO. CIOInsight.com.
February, 2003. 3. As viewed on October 30,
2003. lt http//common.ziffdavisinternet.com/dow
nload/0/1900/0123_research.pdf gt
24
How are CIOs Evaluated
N385
Source The Role of the CIO. CIOInsight.com.
February, 2003. 2. As viewed on October 30,
2003. lt http//common.ziffdavisinternet.com/dow
nload/0/1900/0123_research.pdf gt
25
Gartner Divines Future of CIO

• Business refocuses on profits and returns to
  core competencies
• IT departments are challenged to define and
  deliver a sustainable value proposition

• The CIO is facing a real prospect of becoming a
  zero-budget CIO by the end of the decade. -
  John Mahoney, Gartner Group

• Value in leadership and service integration,
  not in creation of technology

• Gartners CIO Success Cycle
• Lead CIOs must use their access to the
  organization to network with key personnel and
  gain influence and leadership as the IT solution
  provider.
• Shape Demand CIOs must come to understand their
  companys business in order to provide effective
  input on technology demands.
• Set Expectations CIOs must lead executives to
  realistic expectations for projects, and offer
  realistic alternatives when necessary.
• Deliver CIOs must form internal and external
  partnerships that enable them to meet the demands
  of business changes.

Source Anonymous, Gartner Predicts
Zero-Budget CIO. Information Management
Journal. July/August, 2002 8.
26
Case Study
St. Johns Mercy Health Care CIO Dewey Freeman

• Corporate Background
• Sisters of Mercy founded nearly 200 years ago by
  Catherine McAuley. Sisters of Mercy religious
  communities around the world.
• Sisters of Mercy Health System (SMHS), founded in
  1986, consists of facilities in seven states with
  27,800 co-workers and 4,000 physicians. Also
  includes health, dental and vision insurance
  plans and is organizing its own Group Purchasing
  Organization
• SJMHC is a regional Strategic Service Unit (SSU)
  of SMHS
• SJMHC includes St. Johns Mercy Medical Center
  (St. Louis), St. Johns Mercy Hospital
  (Washington), Mercy Medical Group, Unity Health
  Services
• SJMHC includes 8,037 co-workers, 1,293 physicians
• Provides healthcare to St. Louis community and
  missions to other countries

Catherine McAuley
Source Information courtesy SJMH community
relations department
27
Case Study
St. Johns Mercy Health Care CIO Dewey Freeman

• SJMHC Organization

President/CEO SJMHC Michael Morgan
Chief Operating Officer SJMHC Mark Stauder
President MMG Tom Hale, M.D.
Vice President SJMHC Sr. Barbara Grant, RSM
EVP/CFO SJMHC Randy Combs
President UHS Wayne Diewald
President SJMH Michael Zilm
CIO SJMHC Dewey Freeman
Senior Vice President MMG John Hermann
Chief Nurse Executive SJMMC Chris Crain, R.N.
Vice President SJMMC Patrick Christiansen, Ph.D.
Chief Contracting Officer SJMHC Curtis Thompson
VP Medical Affairs SJMHC Paul Hintze, M.D.
Vice President SJMHC Denny Holter
Vice President SJMHC Ron Trulove
Vice President SJMMC Wayne Diewald
Vice President SJMHC Robert Ruello
Vice President SJMHC Sheri Beekman
Source Information courtesy SJMH community
relations department
28
Case Study
St. Johns Mercy Health Care CIO Dewey Freeman

• IT and SJMHC
• IT department employs 131 co-workers, 1.63 of
  the SJMHC workforce
• FY 04 operating budget of 7.1M, 1.1 of total
  FY 03 SJMHC operating revenue
• SMHS ranked by Information Week as one of top 500
  most wired companies, ranking 13th among
  organizations in healthcare, 213th overall
• SMHS named as one of nations most wired health
  systems by Hospitals Health Networks magazine,
  a publication of the American Hospital
  Association

• SJMHC Organization

President/CEO SJMHC Michael Morgan
Chief Operating Officer SJMHC Mark Stauder
President MMG Tom Hale, M.D.
Vice President SJMHC Sr. Barbara Grant, RSM
EVP/CFO SJMHC Randy Combs
President UHS Wayne Diewald
President SJMH Michael Zilm
CIO SJMHC Dewey Freeman
Senior Vice President MMG John Hermann
Chief Nurse Executive SJMMC Chris Crain, R.N.
Vice President SJMMC Patrick Christiansen, Ph.D.
Chief Contracting Officer SJMHC Curtis Thompson
Dewey Freeman
VP Medical Affairs SJMHC Paul Hintze, M.D.
Vice President SJMHC Denny Holter
Vice President SJMHC Ron Trulove
Vice President SJMMC Wayne Diewald
Vice President SJMHC Robert Ruello
Vice President SJMHC Sheri Beekman
Source Information courtesy SJMH community
relations department and SJMHC finance and IT
departments
29
Case Study
St. Johns Mercy Health Care CIO Dewey Freeman

• IT and SJMHC
• IT department employs 131 co-workers, 1.63 of
  the SJMHC workforce
• FY 04 operating budget of 7.1M, 1.1 of total
  FY 03 SJMHC operating revenue
• SMHS ranked by Information Week as one of top 500
  most wired companies, ranking 13th among
  organizations in healthcare, 213th overall
• SMHS named as one of nations most wired health
  systems by Hospitals Health Networks magazine,
  a publication of the American Hospital
  Association

Dewey Freeman
Source Information courtesy SJMH community
relations department and SJMHC finance and IT
departments
30
Case Study
St. Johns Mercy Health Care CIO Dewey Freeman

• Background
• Dewey Freeman, CIO of SMHS and SJMHC for one year
• 16 years of CIO experience
• 12 years CIO at Baptist Health, Little Rock, Ark.
• 3 years at Fairfield Resorts
• 1 year in current position
• Previously industrial engineer at Baptist Health
• Degree in Industrial Engineering and MBA

Dewey Freeman
Source Freeman, Dewey, CIO of Sisters of Mercy
and St. Johns Mercy Healthcare, interviewed in
person by Jason Godefroid, October 11, 2003.
31
Case Study
St. Johns Mercy Health Care CIO Dewey Freeman

• How does Dewey spend his day?
• Arrive at work around 700 a.m
• Ninety percent of day consists of communication ?
• Day of interview, he was talking on his
  cell-phone all the way in from the airport
• Meetings
• Conference Calls
• Participating in planning for future projects
• Status reports
• Small part of day may be to deal with any arising
  crises
• Work with vendor(s) to make sure process works
• Sometimes vendor motivations are different than
  the organizations
• Leave work around 6 p.m. or so.

Dewey Freeman
Source Freeman, Dewey, CIO of Sisters of Mercy
and St. Johns Mercy Healthcare, interviewed in
person by Jason Godefroid, October 11, 2003.
32
Case Study
St. Johns Mercy Health Care CIO Dewey Freeman

• To whom does Dewey report? Relationship with CEO
• In SJMHC role, reports to Chief Financial
  Officer, Randy Coombs
• Communicates daily with Randy
• In SMHS role, reports to Sisters, though budget
  belongs to SJMHC
• Different sets of issues between SJMHC and SMHS
• Has a good relationship with CEO, Mike Morgan
• Doesnt communicate daily
• Plays golf with Mike

Dewey Freeman
Source Freeman, Dewey, CIO of Sisters of Mercy
and St. Johns Mercy Healthcare, interviewed in
person by Jason Godefroid, October 11, 2003.
33
Case Study
St. Johns Mercy Health Care CIO Dewey Freeman

• Biggest challenges
• The biggest challenge is trying to align the IS
  organization with the business goals of the
  organization
• Current SMHS/SJMHC strategy based around patient
  safety
• Barcodes to enter info instead of manual computer
  entry
• Computer Physician Order Entry (CPOE) ? wireless
  technology
• BRIDGE pharmacy project ? Drug and patient
  barcoding to prevent drug errors
• Not only IS goal, but end-user goal
• Achieving end-user buy-in
• Making people understand IT is a tool to achieve
  organizational objectives
• Shorter life cycles ? By the time you research,
  buy, test and so on, the needs have already
  changed

Dewey Freeman
Source Freeman, Dewey, CIO of Sisters of Mercy
and St. Johns Mercy Healthcare, interviewed in
person by Jason Godefroid, October 11, 2003.
34
Case Study
St. Johns Mercy Health Care CIO Dewey Freeman

• What keeps Dewey up at night?
• After so many years and what hes seen, not much
  keeps him up at night.
• Having reliable systems, especially in healthcare
  setting

Dewey Freeman
Source Freeman, Dewey, CIO of Sisters of Mercy
and St. Johns Mercy Healthcare, interviewed in
person by Jason Godefroid, October 11, 2003.
35
Case Study
St. Johns Mercy Health Care CIO Dewey Freeman

• Most successful project under Deweys leadership
• Baptist Health, 1996-99
• Implementation of Clinical Information Systems
• Computer order entry, alerts
• Documentation system
• Digital documents printed to an image
• Information flowed to different forms
• Learned how to build a team
• Learned the importance of having buy-in from the
  end-user and that you need a champion on the
  users end
• IS is uniquely qualified for project management,
  but were not clinical. We need input from the
  end-user. Only the end-user can decide whats
  needed.
• Without the end-user, IS is like a hammer
  sitting on the table Were just a tool waiting
  to be used.

Dewey Freeman
Source Freeman, Dewey, CIO of Sisters of Mercy
and St. Johns Mercy Healthcare, interviewed in
person by Jason Godefroid, October 11, 2003.
36
Case Study
St. Johns Mercy Health Care CIO Dewey Freeman

• Most troublesome project under Deweys leadership
  1
• Large, unnamed Baptist Health hospital
• Tried to implement a materials control package
  for the surgery department
• Good concept driven by IS and Materials
  Management, but Surgery didnt take ownership,
  showed passive interest, no buy-in
• Idea was to barcode each supply item to track
  item usage
• Problems were
• Labor to break open packages and barcode
• Once package was opened, items couldnt be
  returned to vendor. In the OR setting, items are
  frequently returned.
• 500,000 project never implemented
• No input from the end-user on practicality of
  system

Dewey Freeman
Source Freeman, Dewey, CIO of Sisters of Mercy
and St. Johns Mercy Healthcare, interviewed in
person by Jason Godefroid, October 11, 2003.
37
Case Study
St. Johns Mercy Health Care CIO Dewey Freeman

• Most troublesome project under Deweys leadership
  2
• Another Baptist Health hospital
• Tried to implement a computerized tray line
  system, similar to McDonalds, in the Dietary
  department
• Idea was to enable staff to complete a patient
  meal tray every six seconds instead of five or
  fewer trays a minute
• System crashed at high speed, reliable at five to
  six trays per minute
• Frustrating to staff and patients
• Went back to manual process
• 100,000 project

Dewey Freeman
Source Freeman, Dewey, CIO of Sisters of Mercy
and St. Johns Mercy Healthcare, interviewed in
person by Jason Godefroid, October 11, 2003.
38
Case Study
St. Johns Mercy Health Care CIO Dewey Freeman

• Dewey on the role of IT in healthcare
• IT enables processes that bring value to
  organizations by either improving patient safety,
  improve the ability to communicate about a
  patient, to help efficiently run the business,
  and to improve the productivity of the workforce.

Dewey Freeman
Source Freeman, Dewey, CIO of Sisters of Mercy
and St. Johns Mercy Healthcare, interviewed in
person by Jason Godefroid, October 11, 2003.
39
Case Study
St. Johns Mercy Health Care CIO Dewey Freeman

• Dewey on the role of IT in healthcare
• IT is both commodity and strategic
• Strategic in what its used for to provide a
  competitive advantage
• Commodity in the tools to accomplish strategic
  initiatives

Dewey Freeman
Source Freeman, Dewey, CIO of Sisters of Mercy
and St. Johns Mercy Healthcare, interviewed in
person by Jason Godefroid, October 11, 2003.
40
Case Study
St. Johns Mercy Health Care CIO Dewey Freeman

• Dewey on the role of IT in healthcare
• Tools vs. Toys
• Having a well-defined strategy will help decide
  whats a toy and whats a tool
• Maturity of technology and the ability of
  technology to help organization meet its goals
  vs. latest fad
• Pay a little extra if early adopter Dewey
  prefers to be a little off the bleeding edge
• Too important for it to work than to have the
  latest gadgets
• If youre out on the edge, you get gray hairs
  if youre over the edge, you go bald.

Dewey Freeman
Source Freeman, Dewey, CIO of Sisters of Mercy
and St. Johns Mercy Healthcare, interviewed in
person by Jason Godefroid, October 11, 2003.
41
Case Study
St. Johns Mercy Health Care CIO Dewey Freeman

• Dewey on the role of IT in healthcare
• Healthcare in general lags behind other
  industries due to the resources applied to it
• Three percent of total expenses invested in IS
  (SJMHC is 1), while other industries invest at
  least 10-12
• Healthcare fairly regulated, and technology
  dollars tend to center around treatment (new
  medical equipment)

Dewey Freeman
Source Freeman, Dewey, CIO of Sisters of Mercy
and St. Johns Mercy Healthcare, interviewed in
person by Jason Godefroid, October 11, 2003.
42
Case Study
St. Johns Mercy Health Care CIO Dewey Freeman

• Dewey on the role of the CIO in an organization
• The CIO should be looked at as a person who can
  communicate with leaders of an organization about
  his vision. A CIO must be a spokesperson for use
  of systems to accomplish business objective, be a
  spokesperson for innovation, taking IT from its
  current level to a new one. The CIO must be a
  visionary leader.

Dewey Freeman
Source Freeman, Dewey, CIO of Sisters of Mercy
and St. Johns Mercy Healthcare, interviewed in
person by Jason Godefroid, October 11, 2003.
43
Case Study
Graybar CIO - Beatty DAlessandro

• Company History
• 1869 - founded by inventor Elisha Gray and
  entrepreneur Enos Barton as Gray Barton.
• 1872 - became Western Electric Co., supplying
  telegraph components to Western Union Telegraph.
• Upon invention of telephone, became exclusive
  manufacturer of telephone equipment for Bell
  System.

• 1925 - spun of electrical distribution business
  which became Graybar Electric Company, Inc..
• 1929 - employees bought Graybar.
• 1982 - Graybars Corporate headquarters moved to
  St. Louis from its home in the Graybar Building
  above New York Citys Grand Central Terminal.
• 2003 - Graybar Electric Company rebrands itself
  as Graybar to deemphasize the electrical aspect
  of its business and refocus public view on its
  supply-chain management capabilities.

Source Company History. Graybar Electric.
2003. 5 Nov. 2003 http//www.graybar.com/aboutus/
gbhistory.html.
44
Case Study
Graybar CIO - Beatty DAlessandro

• Corporate Information
• 2003 projected revenues 3.8B
• Distribution facilities 280
• Employees 7500
• Employee owned gt50 of stock in hands of
  retirees
• Primary customers electrical and voice/data
  contractors, commercial and industrial firms,
  tel-coms, power utilities, and government
  entities.
• Distributes for 4200 manufacturers of
  electrical, comm/data, and networking products

Source Company Profile. Graybar Electric.
2003. 5 Nov. 2003 http//www.graybar.com/aboutus/
default.html.
45
Case Study
Graybar CIO - Beatty DAlessandro

• Rankings and Recognition
• 1 on Electrical Wholesalings 250 largest
  electrical distributors (2002)
• 3 on Business Weeks list of private U.S.
  info-tech companies (2002)
• 21 on Forbes ranking of to 25 private U.S.
  Companies (2002)
• 344 on 2003 Fortune 500 ranking of largest US
  companies (2003)

Source Company Profile. Graybar Electric.
2003. 5 Nov. 2003 http//www.graybar.com/aboutus/
default.html.
46
Case Study
Graybar CIO - Beatty DAlessandro

• History of Graybar IT
• 1970s - Graybar computerizes its sales system.
• Mid-late 1980s - Graybar builds homegrown system
  encompassing Order Entry, Purchasing, Payables,
  and Receivables. No integration with accounting.
• Late 1980s - Accounting moved their manual system
  to PCs.
• 1998 - Accounting implemented mid-tier accounting
  system, Clarus.
• 2000 - Legacy system is reaching maximum
  capacity. Graybar begins search for replacement.
  Determines to pursue ERP. Contenders JD
  Edwards, Oracle, and SAP
• 2001 - Graybar holds Proof-of-Concept for SAP.
  Will be largest wholesale distributor to
  implement this software primarily designed for
  manufacturing.
• 2003 - SAP go-live. Sales and Logistics systems
  roll out. Finance HR go big-bang.

Source DAlessandro, Beatty, CIO of Graybar,
interviewed in person by Byron Bennett, October
17, 2003.
47
Case Study
Graybar CIO - Beatty DAlessandro

• Graybar IT
• Mission
• Provide the solutions that the business and our
  customers need in a rapid and cost effective way.
  Its our job!
• Staffing
• Currently in rollout phase of ERP implementation
  280 employees in IT, including consultants.
• Staffing should reduce by 15-20 after rollout.
• 3.7 of total Graybar employees.
• IT Budget
• 2003 - 55M.
• 1.5 of total Graybar 2003 revenue.

Source DAlessandro, Beatty, CIO of Graybar,
interviewed in person by Byron Bennett, October
17, 2003.
48
Case Study
Graybar CIO - Beatty DAlessandro

• Background
• Beatty DAlessandro, CIO of Graybar for one year
• 3 years as Vice President over ERP
• 2 years as Director of Strategic Planning
• Led mergers and acquisitions projects
• 15 years of Treasury and Financial Management
  experience
• District Financial Manager
• Treasury Manager at Corporate
• Field financial management positions
• Education
• B.A. in Finance and Marketing
• MBA with emphases in Finance and Organizational
  Design

Source DAlessandro, Beatty, CIO of Graybar,
interviewed in person by Byron Bennett, October
17, 2003.
49
Case Study
Graybar CIO - Beatty DAlessandro
How does Beatty spend his Time?

• Managing IT Operations - 40
• Aligning the vision for IT with Graybars
  objectives
• Ensuring resources are available
• Making tactical decisions
• Managing Outside Relationships - 30
• Meeting and communicating with IT vendors and
  partners
• Visiting Graybar customers
• Non-IT Related Issues - 30
• As member of executive team, deals with issues
  that affect the company at large (e.g. advises on
  Zone organization, new brand, financial
  arrangements).

Source DAlessandro, Beatty, CIO of Graybar,
interviewed in person by Byron Bennett, October
17, 2003.
50
Case Study
Graybar CIO - Beatty DAlessandro

• To whom do you report? Relationship with CEO.
• Graybars CIO reports directly to the CEO, Robert
  Reynolds.
• Beattys relationship with Bob has been close
  throughout ERP project
• The sheer cost of ERP and its potential to
  negatively impact business hold keen interest for
  Bob and the other members of the executive team.
• Communication with CEO
• Talks with Bob about twice a week under normal
  circumstances.
• Exchanges email 4-5 times a week.
• Exchanges are initiated by CEO 50 of time.

Source DAlessandro, Beatty, CIO of Graybar,
interviewed in person by Byron Bennett, October
17, 2003.
51
Case Study
Graybar CIO - Beatty DAlessandro

• Biggest Challenges
• Keeping the funding for a huge technology
  project from being shut off while the economy
  tanked. That was the biggest challenge of my
  career! Beatty DAlesandro. Could have been a
  career killer for me...
• Engaging business leaders and personnel in a
  project.
• Getting business to engage in a project.
• Keeping business engaged throughout project.
• Ensuring that business remains engaged with the
  result after project is complete.
• Personnel issues.

Source DAlessandro, Beatty, CIO of Graybar,
interviewed in person by Byron Bennett, October
17, 2003.
52
Case Study
Graybar CIO - Beatty DAlessandro

• What keeps Beatty awake at night?
• Preparing for SAP go-live.
• Was there some major blunder that would have
  catastrophically affected the company?
• When you implement SAP, you dont want that to be
  front page news on the Wall Street Journal.
• There is background buzz of tension everyday
  that something might go wrong and cause
  disruption of business.
• Likely areas
• Applications
• Network
• Email
• Hardware

Source DAlessandro, Beatty, CIO of Graybar,
interviewed in person by Byron Bennett, October
17, 2003.
53
Case Study
Graybar CIO - Beatty DAlessandro

• Most troublesome project under Beattys
  leadership?
• SAP has been only major project since becoming
  CIO
• Areas of difficulty
• Long term project. Requires great stamina and
  ability to live with stress.
• Cost lots of money. Major feat to keep funding
  flowing during bad economy. Presentations,
  reports, assurances to steering committee just to
  keep going.
• Business disruption. Tremendous resources
  required through all phases of project and most
  of these people have another full-time job.
• Unable to determine degree of success until at
  least a year after up and running.
• Huge resistance to go-live. Fears that not
  enough testing had been done.
• Large discontent for 2 months after go-live. Not
  enough training.

Source DAlessandro, Beatty, CIO of Graybar,
interviewed in person by Byron Bennett, October
17, 2003.
54
Case Study
Graybar CIO - Beatty DAlessandro

• Biggest success under Beattys leadership?
• Again, SAP has been only major project since
  becoming CIO
• Does not consider project a success at this
  point. Rather it is a partial success thus far.
• The question that the interviewer didnt ask
  Would you do it again?
• I would. The challenge of it, ability to grow,
  learn new things, change your perspective, (these
  have made it the) most challenging and fulfilling
  three years of my professional life, Beatty
  DAlessandro.

Source DAlessandro, Beatty, CIO of Graybar,
interviewed in person by Byron Bennett, October
17, 2003.
55
Case Study
Graybar CIO - Beatty DAlessandro

• Beatty on ITs role within Graybar
• With the advent of ERP at Graybar, IT now holds
  higher status within the organization than at
  anytime in prior history.
• Beattys goal is for IT to become invisible to
  the organization.
• The tools of IT should be as commonplace as the
  telephone on your desk. Its there, you need it
  and use it to do your job, but you dont think
  about it, arent afraid of it, dont even really
  see it.
• The people in the IT organization are no longer
  an island of people outside the real business,
  but are involved in the business, solving
  business problems.
• What I hate to hear coming out of our mouths is,
  We cant do that. I want us to say, We have
  the functionality to do that. It will take 5
  months, 8 people and 75K. Is it worth it to you
  to pay for that? Beatty DAlessandro.

Source DAlessandro, Beatty, CIO of Graybar,
interviewed in person by Byron Bennett, October
17, 2003.
56
Case Study
Graybar CIO - Beatty DAlessandro

• What would Beatty look for in a successor?
• Ability to strike balance between strategic and
  tactical focus.
• Strategically, must be the pathfinder to keep the
  company technologically alive and dynamic.
• Tactically, must keep the information factory
  running.
• Understanding of organizational politics.
• Must have broad enough view to understand the
  political effects of decisions throughout the
  organization.
• Ability to align IT organization with the goals
  and initiatives of the business.
• My technology doesnt make any money for me. It
  has to make money for Giglio (Sr. VP Operations),
  Udell (Sr. VP Electrical Sales), and DeSousa (Sr.
  VP Sales and Distribution). If it doesnt, why
  would you give me any money? Beatty DAlessandro.

Source DAlessandro, Beatty, CIO of Graybar,
interviewed in person by Byron Bennett, October
17, 2003.
57
Questions??